Commentary

Will A-B's Pay-For-Performance Sponsorships Become The New Normal?

For decades, Budweiser has called itself the “King of Beers,” and during much of that time, parent company Anheuser-Busch and its venerable brands have also been recognized as the kings
of sports marketing and sponsorship.

Reputed to have invested more than $350 million across its domestic sports portfolio in 2016, the beverage giant lagged only PepsiCo in the
value of its investments. A-B has frequently pioneered sports marketing best practices and birthed iconic and memorable activations from the Clydesdales to Bud Bowl to this past football
season’s ubiquitous catch-phrase supporting Bud Light (I, for one, have had enough of that catch-phrase, so I won’t print it here.)

With such an illustrious history of
sports marketing innovation and an equally impressive level of investment, it shouldn’t be a big surprise that A-B would also look to spearhead and innovate ways in which to protect and optimize
the return on that investment. Last month, this manifested itself in the announcement of a new sponsorship model that incentivizes A-B’s sports marketing partners based on a series of
performance measures. As one who runs a sports marketing research firm, I take measurement quite seriously. So, I’m thrilled to learn of the new Anheuser-Busch initiative.

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It’s important to note that the new model is not intended to be a pure cost-cutting effort. Rather, A-B’s announcement made it clear that baseline rights fees would remain a
central part of its partnership model. However, what will change is the layering on of a variety of to-be-negotiated incentive payments, based on performance measures that include a property reaching
certain thresholds tied to such drivers as attendance, team performance and social engagement.

The general philosophy is that there needs to be a formalized joint accountability
between property and sponsor. Levering these objectives with mutually beneficial, win-win incentives makes all the sense in the world, provided that what is ultimately measured is done so in a
fundamentally sound and thoughtful way.

Our firm’s sponsorship efficacy work typically stresses measurement of return on specific fan engagement objectives, rather than
simple, broader and less tangible measures such as reach or GRP/exposure equivalents. That’s not to dismiss reach as unimportant, and A-B appears to have included that as a central element of
its incentive triggers. But I’ve used this space in the past to forcefully assert that in the words of a former mentor, “You can’t eat impressions.”

That’s why our definition of return on activation objectives includes measures of post-activation change in target audience awareness, recall, consideration intent and alignment with
specifically desired brand attributes relative to a sponsor’s competitive set. It’s also why I’ve taken an equally demonstrative position that to truly measure these engagement
metrics, a rigorous methodological approach incorporating elements of experimental design and sponsor brand obfuscation are tantamount to derive a fair, accurate and value additive read on the success
of the activation.

I’ve stressed that this type of approach reaps benefits to both property and partner in that the resulting analysis yields more than a measurement
scorecard, but ideally facilitates a thoughtful dialogue that identifies areas of greatest activation resonance as well as amplification opportunities. It’s my expectation and hope that
A-B’s new incentive laden contracts will facilitate just that type of measurement.

But it’s also my hope that the Anheuser-Busch announcement sets in motion a renewed
emphasis on efficacy measurement for sports sponsorship overall. In concept, the new A-B model optimizes the potential for properties, sponsors and their respective agencies to all be fervently vested
in the success of the relationship, as evaluated through clearly identified goals. By proactively establishing these goals for a partnership at the onset of the relationship, all parties can work
collectively to design activation strategies that thoughtfully lead to realistic desired outcomes.

Done well, there is clear delineation and enumeration of the target audiences
to be reached, and the specific engagement measures that will define success beyond the total number of eyeballs exposed. If this approach becomes the standard, all involved will hopefully take
greater care in both identifying what realistically can represent success, and in moving beyond the insufficient cookie cutter research methodologies that are prevalent today.

Just as brands seek to differentiate themselves through sports marketing, the means with which those efforts are measured, need to be unique and customized to the specific aspects of the
sponsor’s program. It will be interesting to see if A-B’s new model moves us closer to that ideal.